On April 21st, 2020 CRA noted that applications for the Canada Emergency Wage Subsidy (CEWS) will be available on April 27th, 2020. Businesses will be apply to apply via:
We advise that all businesses carefully review the eligibility requirements for the CEWS to ensure they will be accepted into the program. Please contact any Millards location if you have questions regarding Canada’s COVID-19 Economic Response Plan.
Canada Emergency Wage Subsidy (CEWS)
- The CEWS is retroactive to March 15, 2020 and available for 12 weeks to June 6, 2020 and will be equal to 75% of the first $58,700 normal earnings of each employee or a benefit of up to $847 per week to be received by employers.
- Eligible employers must demonstrate a gross revenue decrease of equal to or greater than 15 % in March 2020 and 30% in April and May 2020.
- Employers can compare their revenue the same calendar month in the prior year or an average of revenue earned in January and February 2020. Employers must use the same comparative approach for the entire duration of the program.
- Applicants will be allowed to calculate their revenues under the accrual or cash accounting methods. The selected account method must be used throughout the entire duration of the program.
- Eligible employers include corporations, non-profit organizations, charities, partnerships and proprietors. Business of all sizes and sectors (except public sector entities).
- Employers will apply for the CEWS through a CRA portal to be created.
- To provide certainty to employers, once an employer is found eligible for a specific period, the employer will automatically qualify for the next period.
- If an employer claims the Temporary Wage Subsidy (10% outlined below) on regular payroll remittances and later qualifies for the CEWS, the CEWS received will be reduced by the TWS previously claimed.
- Applicants who apply and receive the subsidy, who are later determined to be ineligible will be required to repay the CEWS received.
- Applicants who are determined ineligible under fraudulent circumstances will be subject to penalties or even imprisonment.
Amount of the Subsidy:
The amount for an eligible employee for remuneration paid between March 15 and June 6, 2020 is the greater of:
- 75% of remuneration paid, up to a maximum of $847 per week; and
- Lesser of:i) Remuneration paid, up to a maximum of $847 per week; or
ii) 75% of the employee’s pre-crisis weekly remuneration.
For employees who do not deal at arm’s length with their employer, the amount of the subsidy will be limited to the lesser of:
- $847 per week; and
- 75% of the employee’s pre-crisis weekly remuneration.
May include salary, wages and other remuneration like taxable benefits. Generally includes remuneration in which the employer is required to withhold or deduct payroll deductions. Excluded remuneration includes severance pay, stock option benefits and personal use of a corporate vehicle. More information to come.
The pre-crisis weekly remuneration for a given employee would be based on the average weekly remuneration paid between January 1 and March 15, 2020 inclusively, excluding any seven day periods in respect of which the employee did not receive remuneration.
- Is an individual employed in Canada.
- Excludes those employees who have been without remuneration for 14 or more consecutive days in the eligibility period.
Refund of Certain Payroll Contributions
- As an expansion to the CEWS to encourage employers to rehire employees previously laid of and to retain employees who are unable to work.
- A new 100% refund for EI, CPP, QPP and/or QPIP for employer paid contributions for eligible employees.
- Eligible employees are those on leave with pay and not performing any work for the employer in a given week.
- Employers must be eligible to claim the CEWS in respect to that eligible employee.
- Refund is calculated weekly and not subject to the weekly maximum of $847.
- There will be no overall limit imposed on employers.
- Overall collection and remittance process with continue as normal and refunds will be applied for as part of the CEWS portal to be provided.
Click here for additional information provided.
Temporary Wage Subsidy (TWS)
- No new changes have been announced for this program
- The subsidy was effective March 18, 2020 and is equal to 10% of the employee wages to a maximum of $1,375 multiplies by the number of eligible employees and $25,000 per employer.
- This benefit will reduce an employer’s remittance of payroll withholdings to CRA.
- Eligible employers include corporations eligible for the small business deduction, non-profit organizations, charities, partnerships and proprietors.
- Benefit is available for 3 months.
- Employers who do not qualify for the CEWS may continue to qualify for the TWS.
As new information becomes available, we will update our clients on any significant changes.
Please contact any Millards location if you have questions regarding Canada’s COVID-19 Economic Response Plan. Like so many of the client businesses we serve, Millards Chartered Professional Accountants has adopted COVID-19 procedures and protocols to guide safe interaction with others. In an effort to maintain social distancing, please contact us via phone or email only. Please continue to visit this website for ongoing information about COVID-19 as it pertains to your accounting and financial concerns.